Remarks at the Town Hall Meeting of the Air
Chairman, Social Security Board
February 11, 1943
I believe that we should be thinking in terms of developing for this country a unified comprehensive system of contributory social insurance which would cover all of the major economic hazards to which the workers of this country are subjected, namely, old age, disability, death, and unemployment. We already have a federal system providing some protection against loss of income due to old age and premature death, and a federal-state system providing some protection against unemployment, but we have no nationwide system providing protection against the hazards of ill health and disability. Under a unified comprehensive system of social insurance there would be no gaps, no overlaps, and no discrepancies in the protection afforded. Such a system could operate with a maximum degree of simplicity and efficiency, since there would be only one contribution, one report, one record, and one local office to which employers and employees could go to ascertain their rights and duties.
The contributory social insurance system should, of course, be extended to all employees and (except in the case of unemployment and temporary disability) should be extended to all self-employed persons as well. If this were done, we would be providing a minimum basic security for the people of this country upon which they would have a greater opportunity to build a higher degree of security through individual savings and private insurance. In other words, this minimum basic security would constitute a safety net protecting the workers of this country against these major economic hazards, not a feather bed releasing them from the necessity of helping themselves.
While I believe responsibility for the establishment and maintenance of this unified comprehensive system of social insurance should be centralized in the Federal Government, I believe that the actual administration of the system should be highly decentralized with representative advisory committees and appeals councils in the several States.
Even with the comprehensive social insurance system proposed, it would be too much to expect that all destitution would be eliminated. No system of insurance can insure against hazards that have already occurred or can provide adequate protection under all conceivable circumstances. Therefore, I believe that we should not only maintain but greatly strengthen our present system of public assistance. I believe that this system should continue to be administered by the States. However, I believe that the Federal Government should make grants to the States for assistance rendered to any needy persons, not only to the needy aged, the needy blind, and dependent children, as is the case at the present time. I also believe that there should be special federal aid for States with low per capita income.
An expanded social security system such as I have outlined can play a vitally important role in the economic readjustment and reconstruction that will be necessary when the war ends. On the one hand, it can provide protection to individuals and families against the loss of income which they may suffer for one reason or another after the war, when a decline from the high levels of war-time production will increase the burden of the various hazards. On the other hand, from the standpoint of the economic system as a whole, social security can aid in maintaining consumer purchasing power when the national income exhibits a tendency to shrink and thus can assist in maintaining employment at a higher level.
The obvious question which will occur to many who may agree with the inherent desirability of having a comprehensive social security system available at the end of the war is whether the present is a practical and appropriate time for action. The enormous outlays and the vast administrative undertakings now necessary for the prosecution of the war may appear to suggest that action be deferred until after the war is won. The answer is that unless action is taken now there is grave danger that the postwar period will arrive before a well-rounded social security system can be put into successful operation. A successful social security system cannot be improvised overnight.
As a matter of fact, the extension of social security now would not only not interfere with but would greatly aid in the successful prosecution of the war. The greater sense of security which would result would make the people of this great Nation more effective defenders of democracy. This has been amply demonstrated in Great Britain, where social security has already been extended while the bombers roared overhead and where it is now proposed that there be far greater extension.
Entirely apart from the increased human happiness and well-being that could result, the fact is that immediate expansion of the social Security system is highly desirable from the standpoint of the Nation's economic and fiscal circumstances. Two of the major economic problems of the war effort are to control inflation and to obtain revenues through taxation or borrowing or both. The enlarged excess of contributions over disbursements which would occur during the war period would curtail current purchasing power and serve as a potent force in the fight against inflation. Investment of the excess in government obligations would make corresponding sums available to the Treasury.
As President Roosevelt has said, "This is one case in which social and fiscal objectives, war and postwar aims, are in full accord. Expanded social security, together with other fiscal measures, would set up a bulwark of economic security for the people now and after the war and at the same time would provide anti-inflationary sources for financing the war."